Filings for U.S. jobless benefits declined to a three-week low, indicating persistent demand is encouraging employers to maintain headcounts.
Unemployment applications dropped by 6,000 to 271,000 in the week ended Aug. 22, a Labor Department report showed Thursday. The median forecast of economists surveyed by Bloomberg called for 274,000 jobless claims.
Demand for skilled workers as the unemployment rate falls is convincing hiring managers to keep staffing levels consistent with sales. Pay raises, alongside strengthening job security, would help provide a bigger boost to consumer spending, which accounts for almost 70 percent of the economy.
“Companies are concerned that if they let people go, even if they’re not their star employees, that it’ll be difficult to replace them,” Aaron Smith, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “Wage pressures should be picking up, supporting the positive outlook for consumer spending.”
Another report Thursday from the Commerce Department showed a bigger advance in household purchases in the second quarter than previously estimated. A 3.1 percent increase in spending helped boost gross domestic product to a 3.7 percent gain in the three months ended in June.
Business spending, government outlays and homebuilding were also revised higher for the quarter.
Estimates in the Bloomberg survey of 50 economists for jobless claims ranged from 260,000 to 280,000 after an initially reported 277,000 filings a week earlier. Applications for benefits dropped to 255,000 in mid-July, the lowest level since November 1973.
No states were estimated last week and there was nothing unusual in the data, according to the Labor Department.
The four-week average of claims, a less-volatile measure than the weekly figure, rose to 272,500 from 271,500 in the prior week.
The number of people continuing to receive jobless benefits increased by 13,000 to 2.27 million in the week ended Aug. 15. The unemployment rate among people eligible for benefits held at 1.7 percent. These data are reported with a one-week lag.
Since the beginning of March, claims have held below the 300,000 level that economists say is consistent with an improving labor market.